CBSE Class 11-commerce Answered

Risk varies depending on various factors. The degree of risk which a business faces depends on the nature of business (which a business derives from the type of goods produced and sold by it) and the size of the business (which relates to the quantum of goods produced and sold by the business). For instance, a business which produces goods of daily use, such as soap, toothpaste or salt, faces a lower business risk than a business which produces luxury goods which are highly dependent on consumer preferences. Similarly, a large-scale business is more prone to risks than a small-scale business as it involves more financial as well as material resources.